Shandong Qixia v Yong Zeng Yuan: Breach of Contract & Fiduciary Duties

Shandong Qixia Shida Fruits Refrigeration Co., Ltd ("Shida"), an apple supplier, sued Yong Zeng Yuan Pte Ltd ("YZY") in the General Division of the High Court of Singapore, for failing to pay for apples supplied. YZY filed a counterclaim against Shida and Mr. Hou Chao, alleging breach of fiduciary duties and conspiracy. The court found in favor of Shida, concluding that YZY owed Shida US$1,572,142 for the supplied apples and dismissing YZY's counterclaims.

1. Case Overview

1.1 Court

General Division of the High Court

1.2 Outcome

Judgment for Plaintiff

1.3 Case Type

Civil

1.4 Judgment Type

Judgment

1.5 Jurisdiction

Singapore

1.6 Description

Apple supplier Shandong Qixia sued distributor Yong Zeng Yuan for unpaid invoices. Yong Zeng Yuan counterclaimed, alleging conspiracy and breach of fiduciary duties. The court ruled in favor of Shandong Qixia.

1.7 Decision Date

6 March 2022

2. Parties and Outcomes

Party Name	Role	Type	Outcome	Outcome Type	Counsels
Shandong Qixia Shida Fruits Refrigeration Co., Ltd	Plaintiff, Defendant in counterclaim	Corporation	Judgment for Plaintiff	Won	Charmaine Elizabeth Ong Wan Qi of Legal Solutions LLC Yeo Teng Yung Christopher of Legal Solutions LLC
Yong Zeng Yuan Pte Ltd	Defendant, Plaintiff in counterclaim	Corporation	Counterclaim Dismissed	Lost	Aw Wen Ni of WongPartnership LLP Tan Kia Hua of Chen Jiahua
Hou Chao	Defendant in counterclaim	Individual	Counterclaim Dismissed	Neutral	Lee Shu Xian of Infinitus Law Corporation Ng Khai Lee of Infinitus Law Corporation

3. Judges

Judge Name	Title	Delivered Judgment
Philip Jeyaretnam	Judge	Yes

4. Counsels

Counsel Name	Organization
Charmaine Elizabeth Ong Wan Qi	Legal Solutions LLC
Yeo Teng Yung Christopher	Legal Solutions LLC
Aw Wen Ni	WongPartnership LLP
Tan Kia Hua	Chen Jiahua
Lee Shu Xian	Infinitus Law Corporation
Ng Khai Lee	Infinitus Law Corporation

4. Facts

Shida supplied apples to YZY for sale to NTUC Fairprice and Kian Seng.
YZY stopped making payments to Shida in January 2019.
Shida claimed US$1,572,142 from YZY for unpaid apples.
YZY counterclaimed, alleging overpayment and conspiracy.
Mr. Hou was a director and shareholder of YZY.
Mdm Gu was a director and shareholder of YZY and was married to Mr. Hou from 1986 to 2020.
YY was a fully-owned subsidiary of YZY between 2002 and 2012.

5. Formal Citations

Shandong Qixia Shida Fruits Refrigeration Co., Ltd v Yong Zeng Yuan Pte Ltd, Suit No 49 of 2020, [2022] SGHC 48

6. Timeline

Date	Event
2020-01-01	Suit filed by Shandong Qixia Shida Fruits Refrigeration Co., Ltd against Yong Zeng Yuan Pte Ltd
2021-06-02	Hou Chao's affidavit of evidence-in-chief filed
2021-06-02	Gu Xiaolan's affidavit of evidence-in-chief filed
2021-06-02	Hou Yini's affidavit of evidence-in-chief filed
2021-06-22	Shida filed further and better particulars
2021-06-25	Yang Chiew Yung's report dated
2021-08-30	Trial began
2021-09-17	Trial concluded
2021-10-15	Plaintiff’s Closing Submissions
2021-10-15	Defendant’s Closing Submissions
2021-10-15	Second Defendant in the counterclaim’s Closing Submissions
2021-12-03	Judgment reserved
2022-03-07	Judgment issued

7. Legal Issues

Breach of Contract
- Outcome: The court found that Yong Zeng Yuan Pte Ltd breached its contract with Shandong Qixia Shida Fruits Refrigeration Co., Ltd by failing to pay for the supplied apples.
- Category: Substantive
Breach of Fiduciary Duties
- Outcome: The court found that Mr. Hou Chao did not breach his fiduciary duties to Yong Zeng Yuan Pte Ltd.
- Category: Substantive
Unlawful Means Conspiracy
- Outcome: The court found that there was no conspiracy between Shida and Mr. Hou to injure YZY by unlawful means.
- Category: Substantive

8. Remedies Sought

Monetary Damages
Refund of Excess Payments

9. Cause of Actions

Breach of Contract
Breach of Fiduciary Duty
Unlawful Means Conspiracy

10. Practice Areas

Commercial Litigation

11. Industries

Food and Beverage

12. Cited Cases

Case Name	Court	Affirmed	Citation	Jurisdiction	Significance
No cited cases

13. Applicable Rules

Rule Name
No applicable rules

14. Applicable Statutes

Statute Name	Jurisdiction
Companies Act 1967	Singapore

15. Key Terms and Keywords

15.1 Key Terms

Apples
Purchasing Agreement
Invoices
Excess Payments
Fiduciary Duty
Conspiracy
Director
Shareholder

15.2 Keywords

contract
fiduciary duty
apples
Singapore
litigation

17. Areas of Law

Area Name	Relevance Score
Fiduciary Duties	90
Contract Law	80
Breach of Contract	80
Conspiracy by Unlawful Means	75
Contracts for sale and supply of goods	70
Corporate Law	70
Torts	60
Commercial Law	50
Business Litigation	50

16. Subjects

Contract Dispute
Corporate Governance
Civil Litigation